The transaction was funded from the scheme’s assets. It includes bespoke “residual risk” cover to provide certainty; for example, to cover any future data corrections.
The transaction benefited from significant preparatory work undertaken by the Fund to put it in a position where it could move quickly to secure attractive pricing and obtain comprehensive risk cover.
Ian Forrest, Chairman of the Trustee, said: “We are delighted to have secured the benefits for all members in full with an established, UK regulated insurance company. The Trustees are grateful to their various advisers for preparing the Fund to achieve this buy-in, and to PIC for dealing with the transaction so efficiently.”
The Trustee was advised by Lane Clark and Peacock (LCP), the lead adviser for the transaction, Hogan Lovells on legal matters, Pi Consulting as the Fund Secretary and Aon Hewitt on funding and administration. The sponsoring employers were advised by KPMG.
Ken Hardman, partner in LCP’s specialist de-risking practice, said: “This demonstrates the benefit of investing in work up front, which enabled even a complex transaction such as this to be carried out quickly and efficiently. Pricing has improved markedly due to lower longevity expectations and increased insurer competition, and the Fund was able to seize this opportunity.”
Uzma Nazir, Head of Origination Structuring at PIC said: “PIC is very pleased to have provided the trustees with insurance to secure the pension benefits for the members of Fund. The Fund was in a good position having de-risked the assets over several years. We were able to accept the Fund’s assets as payment of the premium, which gave the Trustee certainty on price. We were also happy to offer the Trustee flexibility where needed and a commitment to outstanding policyholder care, which is something we at PIC pride ourselves on.”
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